The iPhone sales figures where probably a disappointment, for Apple. Had it been released by any other company it would have been viewed as a huge success. The sales numbers are just pretty poor, for an iPhone.
I think Apple has such high expectation to sales figures that even if a smaller iPhone comes in, even as the 10th best selling phone, that's maybe only 5% of all iPhone sales. Massively successful as a phone, millions of people bought it, but to Apple, the SE is a side hustle at best.
My daughters friends made fun of my iPhone SE3, they had never seen a phone that small.
We don’t have the iPhone 17e, so for now there’s no way to tell if they will do this every year or what.
Similarly people have called the 16e as a replacement for the SE line, but that’s a cost assessment not one based of form factor. It could be most people bought the SE because it was cheap, but without two different form factors at identical prices there’s no way to tell.
It’s a replacement in the sense that they discontinued the SE when they introduced the 16e. I agree that it’s not a very close replacement in practical terms, but that’s also why the designation changed.
Regarding the 17e, the supply chain rumor mill keeps mentioning it, so it definitely seems to be a thing.